Archive

WTO deadlock threatens Doha round

Ministers remain deadlocked after two days of emergency WTO talks, placing in jeopardy the future of the Doha round of negotiations launched in 2001 and aimed at boosting trade and reducing poverty.

30 Jun 2006 23:03 GMT

Lamy says that the future of the WTO can be at stake

Negotiators from about a third of WTO member countries are in Geneva at the behest of Pascal Lamy, the organisation's director-general, attempting to find common ground on a proposed deal to lower farm trade barriers.

Officials on all sides have described the gathering so far as a failed exercise as the world's major trading powers appeared intractable on Friday.

"We are putting at risk the future of the Doha round, the WTO, and the multilateral system itself," Lamy told negotiators.

"Quite frankly, it is difficult to exaggerate the importance of this round. Its potential for contributing to global growth, correcting imbalances and promoting development is obvious."

Number crunching

Many are citing Washington's hard line on farm supports as the biggest obstacle.

Johanns says the US is offering fundamental changes to subsidies

Mike Johanns, the US agriculture secretary, told reporters that his country was offering "fundamental change" to its subsidies and Washington has said it will cut its WTO allowance for most trade-distorting subsidies, the "amber box", by 60%.

"How could anybody argue that it is not a meaningful reduction, when literally we are saying the very heart of the US farm programme is directly impacted by the cuts we have put on the table?" he said.

However critics say that, overall, the US offer will not necessarily cut into actual spending, because they can make up the payments from other areas, giving them a budget of around $22 billion.

Johanns refuted such claims.

"The majority of the subsidies we would run through US farm programmes operate through the amber box," he said, adding that the 60% proposal would cut that spending allowance to $7.6 billion from an estimated $12.5 billion in 2005.

Further delay

The Indian trade minister (L)threatened to walk out of talks

Washington says the European Union is at fault for not cracking open agricultural markets.

Rich nation farm subsidies and tariffs, together with industrial tariffs in developing states, form the "triangle" where Lamy says a deal must be done.

Disagreements between the EU and the US have already held up the Doha round, and put it two years behind schedule.

World leaders, including George Bush, have pledged their commitment to the talks, but most countries have rigidly stuck to the same positions they have maintained for months.

Poor nations say a deal in farm goods must be concluded first to protect their main export opportunities and India's trade and industry minister has threatened to walk out on the talks if the deadlock continues.

If a blueprint for a binding treaty is not agreed this summer then diplomats say the whole process may have to be postponed until after the US presidential elections in 2008 because George Bush's authority to strike fast-track trade deals expires next year.